- Chip Hanna
- Reading Time: 4 minutes
SAP’s annual Sapphire conference starts next week, and based on the agenda, it appears to be the usual mix of touting their business and the “magical” capabilities they are bringing to the market along with the strategically placed and carefully curated customers whose job is to publicly affirm that SAP is the best thing that’s ever happened to them.
Over the course of the Sapphire event, you will be exposed to a lot of hype and buzzword bingo that can be hard to parse through – especially if you have some critical questions on some of SAP’s key offerings, like SAP RISE, or their AI capabilities. Here, I will provide the most pressing questions SAP customers should be seeking to answer at Sapphire in terms of SAP’s RISE and AI strategy.
Visibility and Predictability Around SAP RISE Constructs
There is a seemingly endless drip of potential commercial and operational constructs offered for RISE. While SAP is a sophisticated, enterprise-class software company, it almost feels as though with RISE, they are making it up as they go when one looks at the offerings over the past 3 years.
From the Private Cloud Edition (PCE) to the Private Tailored Option (PTO), and now Commit to Consume (C2C), SAP has tweaked and adjusted the service offerings in a way that appears to be reactive to clients’ declining to make the leap to RISE. This uncertainty has done nothing to reassure conservative Fortune 100 companies that the RISE offering is stable or that they should adopt RISE now rather than waiting for a more advantageous commercial construct to come to market.
We’ve advised on dozens of RISE deals and have maintained contact with those clients. When we circle back with them, there’s a similarity in their feedback: SAP is not well organized or coordinated, they are slow to execute on simple tasks, and they’ve not shown a willingness to provide any contractual accountability other than token SLA credits.
Even though SAP has tightly defined their responsibilities under RISE, not one of our clients has indicated that their journey to RISE was simple, on time or on budget in contrast to SAP’s PowerPoint promises.
Questions to Ask at Sapphire Around SAP RISE
- What is SAP’s plan to be better operationally with the RISE platform?
- When are they going to demonstrate their willingness to be accountable for performance, i.e. accept meaningful financial penalties for failure to deliver?
Clarity Around SAP’s AI- Strategy
This is a real opportunity for SAP to put forth some definitive positions and transparency into what SAP’s AI solution is (and is not). SAP claims there already is AI capability in their products, but it’s not clear on what capabilities comes with their standard offering, what enhanced capability needs to be purchased separately, and the differences in value that optionality delivers.
SAP’s high-level definition of AI is the capability to automatically deliver information which allows customers to make better and quicker decisions. By that definition, my 2005 SUV is AI enabled as, in addition to the usual fuel gage, it also tells me how many miles I have until empty and real-time consumption per mile, which allows me to make quick and accurate decisions on when to stop for gas.
Despite an announcement months ago, SAP has yet to clearly define the business case for their Premium Plus product package, including the specific benefits related to the enhanced Generative AI within the package. AI will be the top buzzword at Sapphire because it is a top buzzword in the industry, and SAP must be able to demonstrate something more definitive from a product perspective to help customers understand why they should be paying more for AI capabilities.
Companies are scrambling to detail what their AI strategy will be and how it will differentiate themselves in the market. The key to any investment in technology is simply understanding the cost vs. benefit equation.
SAP’s AI cost model is either a very closely kept secret or has yet to be fully defined. SAP has stated some AI capabilities come standard, while enhanced capabilities can be purchased separately in other ways, such as the Premium Plus package. They have not clearly defined how much AI functionality you get, how you know you have enough, or how to track and monitor AI consumption. It’s fair to assume that SAP should have this sort of basic product information solved prior to launch. The longer it takes for SAP to provide some transparency, the less likely customers will look to them for AI solutions.
Questions to Ask at Sapphire Around AI
- Beyond “Joule,” what SAP products actually contain AI capabilities?
- Where’s the value and how do clients’ predictability balance such with cost?
The Key to Understanding SAP’s RISE and AI Strategy at Sapphire
While it may be aspirational to believe that SAP would come to Sapphire and provide the necessary transparency and detail their customers are clamoring for with regard to SAP’s RISE and AI strategy, these sorts of events require a significant investment from those same customers, and if SAP is not prepared to shed more light on these solutions, it’s fair to say that the value of Sapphire will materially diminish.
